United States imposes additional duties on Bombardier

08 October, 2017, 00:44 | Author: Priscilla Morrison

For the second time in two weeks, the U.S. Commerce Department hit Canada'sBombardier Inc. with tariffs Friday, siding with American jet maker Boeing Co., which claims that its rival is selling its C-Series jets at unfairly low prices.

In a statement, Boeing said the Department of Commerce had "affirmed the magnitude to which Bombardier has dumped C Series aircraft in the United States, selling those aircraft at prices millions below production cost in an illegal effort to grab market share in the U.S. single-aisle airplane market".

The duties are in response to a complaint from USA competitor, Boeing, that accused Quebec-based Bombardier of selling 75 of its new CSeries jets to Delta Air Lines at below production cost to gain market share and that the government subsidized the project.

UK Prime Minister Theresa May had lobbied US President Donald Trump over the dispute sparked by complaints from rival Boeing that Bombardier received unfair state subsidies from the UK and Canada, allowing the sale of airliners at below cost prices in the US.

The report said more than half of the materials Bombardier buys for the new CSeries plane come from US suppliers, with the most spending in California, Connecticut, Illinois, Iowa and Kansas, the report said.

The U.S. Commerce Department will release its final decision on the anti-dumping duty in December.

A week after the imposition of countervailing duties of around 220 % on the CSeries aircraft to Bombardier, Washington returned to the charge with anti-dumping duties of 79,82 % at the end of a preliminary decision is likely to be, again, to raise the indignation in business circles, trade union and political.

The hit is on top of an earlier tariff of almost 220 per cent, relating to subsidies Bombardier received from Canada and the UK.

In a statement on Friday, she said the Canadian government was "extremely disappointed by and in complete disagreement with" the new tariff that "put [s] at risk the nearly 23,000 U.S.jobs that depends on Bombardier and its suppliers".

"We will continue to verify the accuracy of this decision, while doing everything in our power to stand up for American companies and their workers", Ross added.

The Chicago-based aircraft giant said it welcomes the decision affirming its view that Bombardier sold the CSeries to Delta at prices below production cost to illegally grab market share in the single-aisle airplane market.

He said workers will fight even harder to get the duty reversed. It was an order of 75 aircraft worth more than United States $5 billion.

U.S. aerospace analyst Richard Aboulafia said the high duties will hurt CSeries sales efforts to leasing companies and shut the plane out of the U.S. unless the U.S. International Trade Commission effectively ends the challenge in February.

The penalties were imposed after officials decided Bombardier got illegal help from the United Kingdom and Canadian governments.

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